Buying a Home in Salem, Oregon: A 2022 Market Update

Published:
January 19, 2018
Last updated:
April 6, 2022
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Thinking about buying a home in Salem, Oregon in 2022? If so, you should know that the local real estate market has changed significantly over the last few years. This is especially true when it comes to home prices and inventory. 

If you are planning to purchase a home in Salem this year, you’ll want to do your homework and gather all the facts about the local housing market before you make a move. Here’s a look at current real estate market conditions for those who are planning to buy a home in Salem in 2022.

The Cost of Buying a Home in Salem, Oregon

In cities across the Pacific Northwest, home prices have risen significantly over the past couple of years. Having said that, prices are still on an upward trend in Salem and have been for years. Considering this fact, home buyers will be paying more for a home in Salem in 2022 than they would have in years past.

So, how much might you pay when buying a home in Salem in 2022? The median home price (which is basically the midpoint for the real estate market) rose to around $408,518 by January 2022. And house values in Salem, Oregon are expected to continue rising throughout 2022.

According to the real estate data company Zillow, the median home price in Salem rose by 20.8% over the last 12 months (as reported in January 2022). That’s a hefty pace, helping to classify Salem’s housing market as hot right now. And prices are expected to climb at a higher pace over the duration of the next 12 months.

In “normal” years, home prices in the U.S. tend to rise between 3% and 5% annually. So, Salem is over the average rate of price increase.

That’s the first thing you should know about buying a home in Salem 2022. House values today are much higher than they were just a few years ago. Still, Salem is considered to be a fairly affordable real estate market, in relation to median household incomes in the area. 

In fact, prices in Salem are much lower than what they are in Oregon as a whole. Home prices in the state are currently $486,642.

The good news, for those planning to buy a home in Salem, is that if they buy soon, they will be able to take advantage of price appreciation, as prices are expected to rise over the next year. That’s a faster pace of appreciation than what we’ve seen over the past 12 months, so buyers who get into the market early enough this year can pay less for a home while benefiting from an increase in home equity.

But the inventory situation is still abnormal, which we’ll get into next.

Related: First Time Home Buyer Guide OR

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Housing Inventory Is Still Below “Normal”

This is another important trend for those planning to buy a home in Salem, Oregon in 2022. Like much of the Pacific Northwest, this housing market is currently experiencing an inventory shortage. There is still plenty of demand from home buyers, but not enough properties for sale to satisfy that demand.

This is true for much of the country right now, but the shortages are most pronounced within the major cities of Oregon and Washington.

Buyers will be facing some competition when looking for a home to buy in Salem, OR.

The main source of the inventory issue in Salem and many other parts of Oregon is the low levels of home construction.

Rents Are High

The average rent in Salem right now is $1,274 per month. That’s quite high given the fact that you could probably pay less on mortgage payments based on the relatively low cost for a home in the city.

This is particularly true because of how low mortgage rates have been over the past few months. As of January 2022, rates for a 30-year fixed-rate mortgage are 3.56%. That’s still relatively low and makes getting a mortgage somewhat affordable.

Higher Loan Limits Are Available in 2022

Here’s more good news for Salem home buyers. Loan limits across the state of Oregon have been increased in response to significant price gains. This is true for FHA, VA and conventional mortgage loans. This means borrowers have higher financing capacity, without having to use a jumbo mortgage.

The conforming loan limit (for a conventional or “regular” mortgage) was increased to $647,200 for 2022. This limit applies to Salem and all of Marion County, Oregon. Anything above that amount is considered a jumbo loan.

FHA loan limits were increased to $420,680, for a single-family property in Marion County.

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Looking For More Info on Mortgages in Salem?

Are you looking to buy a home in Salem in 2021 and want to apply for a mortgage to finance it? We’re here to help. Sammamish Mortgage has been providing mortgage programs to borrowers all across the Pacific Northwest since 1992, including Washington State, Colorado, Idaho, and Oregon. Get in touch with us today if you have questions about applying for a mortgage in Salem.

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